Probably my favourite app on my iPad is, errm, Kindle. Yes, getting my £600 device to behave like a £100 one is where it's at.
That aside, what is interesting about the Kindle is the way it is beginning to alter my book buying behaviour. In short it is iTuning my purchasing behaviour, in that I am tending to buy more on impulse – a recommendation or thought comes to me, and I don't add it to a wishlist, I buy it. This means I am adopting a more exploratory approach, buying books I wouldn't do otherwise, or ones I know I only want a section from.
But this behaviour is hampered by the publishers and arcane pricing policies. iTunes had the advantage that music (in the form of CDs) was evenly priced, ranging from around £3.99 to £13.99. This meant that getting consensus from recording companies on a set price of 99c for a track was relatively easy. Books on the other hand (and particularly academic books) range wildly from £1 to £100. Reaching agreement on a uniform price is therefore more difficult. But, for the sake of the industry itself, it is essential. At the moment the Kindle version is usually the same price as the physical one – and laughably, sometimes it is more expensive.
Amazon is probably the only player big enough to push this through. Publishers are proprietary and closed by instinct, so want to believe e-books are just another outlet but with higher profit margins. There are two reasons why I think they need to alter their behaviour:
i) iTuning buying behaviour leads to greater sales – if the standard price for a Kindle book was sufficiently low, say £1.99, then it leads to higher sales, particularly in the long tail. Brynjolfsson, Hu & Simester (2007) demonstrate that when a product moves online the concentration of sales becomes more distributed: “the Internet channel exhibits a significantly less concentrated sales distribution when compared with the catalog channel, even though these two channels offer the same products at the same set of prices.” Being online encourages a more ‘long tail’ oriented set of behaviours. They further argue that as search costs reduce, then so sales concentration becomes more skewed towards niche products. This means selling more of those special interest books, but only if the price is sufficiently low to encourage 'I may as well' purchasing behaviour. Maintaining the price point artificially high loses the benefits they might gain from this new channel.
ii) Resentment breeds piracy – by maintaining physical object prices, buyers become irritated at what they perceive as both greed and a lack of understanding around the new channel. Music piracy was driven partly by getting something for free, but also out of frustration that music companies were either ignoring the internet or treating it just like an infinite shopfront. One of the reasons Apple got agreement for iTunes was the fear of Napster. By repeating these mistakes publishers will drive potential customers into piracy, and then spend ages trying to lure them back. This is a key moment for book purchasing, they shouldn't ignore the very recent lessons history has to teach them. I want my book purchasing behaviour to be iTuned, don't turn me away now.